If Bad Credit Risks Are the Ones Who Most Actively

question 93

Multiple Choice

If bad credit risks are the ones who most actively seek loans and,therefore,receive them from financial intermediaries,then financial intermediaries face the problem of

• A)moral hazard.
• B)adverse selection.
• C)free-riding.
• D)costly state verification.

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Definitions:

Comprehensive Business Reporting

A holistic approach to reporting that combines financial, social, and environmental performance indicators to give stakeholders a more complete view of a company's activities and impact.

CFA

Chartered Financial Analyst, a professional designation given by the CFA Institute to finance and investment professionals.

Joint Conceptual Framework

A collaborative effort among accounting standards boards to establish a common conceptual foundation for the development of accounting standards.

IASB and FASB

The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) are organizations that establish and communicate standards of financial accounting and reporting.